Rent vs buy calculator: is it better to rent or buy a home?

How do you read the rent vs buy result?

The calculator adds up everything you’d spend and everything you’d get back under each choice, then tells you which costs less over the years you plan to stay. The key number is the break-even year: the first year in which buying has cost you less, in total, than renting.

Here’s what goes into each side:

Renting	Buying
Monthly rent, rising each year at your rent growth rate	Mortgage payment (principal and interest)
Renters insurance	Property tax, homeowners insurance and HOA dues
Investment growth on the down payment and closing costs you didn’t spend	Maintenance and repairs
Investment growth on any monthly savings versus owning	Closing costs to buy and selling costs at the end
	Minus the equity you walk away with after the sale

If the break-even year is later than the number of years you expect to stay, renting probably comes out ahead. If it’s well before, buying likely wins on money alone. If there’s no break-even within 30 years, your local prices strongly favor renting.

The result is an estimate, not a forecast. Home prices, rents and investment returns all move, so try a pessimistic and an optimistic set of numbers and see whether the answer flips.

Which inputs matter most?

Four inputs drive most of the result: how long you stay, the mortgage rate, home price growth, and what your money would earn if you rented instead.

• Years you stay. Buying carries big one-time costs. Redfin puts buyer closing costs at 2% to 5% of the price. Opendoor estimates the total cost of selling, including agent commissions, at 10% to 15% of the sale price. A short stay rarely recovers both.
• Mortgage rate. In the early years most of each payment is interest. On a $334,000 loan at 7.40%, about $24,600 of the first year’s payments go to interest and only about $3,100 to principal.
• Home appreciation. This is the input people are most optimistic about. NAR reported prices up just 1.3% year over year in September 2026. Try 2% to 3% rather than recent boom years.
• Return on invested savings. A renter who invests the down payment earns a return on it. If you wouldn’t actually invest the difference, set this low.

Smaller inputs, like rent growth and HOA dues, can still swing a close result. Change one at a time to see which one moves your break-even year most.

What do renting and buying cost right now?

As of October 2026, national figures favor renting on a monthly basis. Here are the latest numbers, with dates:

Figure	Value	Source and date
30-year fixed mortgage rate	7.40% (6.30% a year earlier)	Freddie Mac PMMS, Oct 8, 2026
15-year fixed mortgage rate	6.73%	Freddie Mac PMMS, Oct 8, 2026
Median existing-home price	$417,500, up 1.3% year over year	NAR, September 2026 sales, released Oct 13, 2026
National median rent	$1,388 a month, down 0.4% year over year	Apartment List, September 2026
Median gross rent (includes utilities)	$1,413 a month	Census Bureau ACS, 2020-2024
Median value of owner-occupied homes	$332,700	Census Bureau ACS, 2020-2024

Put those together for a rough national example. A $417,500 home with 20% down ($83,500) leaves a $334,000 loan. At 7.40% over 30 years, principal and interest come to about $2,313 a month. Add property tax, homeowners insurance and maintenance, and the monthly cost of owning can top $3,000, against a median rent near $1,400.

That gap doesn’t settle the question. Part of the mortgage payment builds equity, and rent rises over time while a fixed-rate payment doesn’t. That’s exactly what the calculator weighs. But it shows why the break-even year is long at today’s rates.

What is the price-to-rent ratio?

The price-to-rent ratio divides a home’s price by a year of rent for a similar place. It’s a quick screen for whether a market leans toward renting or buying.

Rocket Mortgage gives these rough bands:

Price-to-rent ratio	What it suggests
Below 15	Buying is usually more affordable
15 to 21	Balanced; either can make sense
Above 21	Renting is usually more affordable

Using September 2026 national figures, $417,500 divided by $16,656 a year ($1,388 times 12) gives a ratio of about 25. The Census Bureau’s longer-run figures, $332,700 divided by $16,956, give about 20. Either way the country sits at the rent-leaning end. Your city may be very different, so plug in a home you’d actually buy and a rental you’d actually live in.

What are the hidden costs of owning a home?

The mortgage payment is only part of what owners pay. These are the costs first-time buyers most often underestimate:

Cost	Typical size	Notes
Maintenance and repairs	1% to 4% of the home’s value a year	Fannie Mae’s suggested budget; older homes need more
Buyer closing costs	2% to 5% of the price	Redfin; lender fees, title, appraisal, prepaid items
Selling costs	About 10% to 15% of the sale price	Opendoor; includes commissions of about 5% to 5.5%
Property tax	Varies widely by state and county	Often rises with assessed value
Homeowners insurance	$1,569 a year on average (2022)	Insurance Information Institute, HO-3 policies
HOA dues	$0 to several hundred a month	Common for condos and townhomes

On a $417,500 home, Fannie Mae’s 1% to 4% range means $4,175 to $16,700 a year for upkeep. As a renter, a broken water heater is your landlord’s bill. As an owner, it’s yours.

Is it better to rent or buy if you might move soon?

Usually renting is better if you expect to move within a few years. The one-time costs of buying and selling need time to be offset by equity and appreciation.

NAR’s 2025 Profile of Home Buyers and Sellers found sellers had stayed a median of 11 years, a record. The same report found first-time buyers were a record-low 21% of buyers, with a median age of 40. Many people are renting longer, often for good financial reasons.

Non-financial factors belong in the decision too:

• Flexibility. A lease ends in a year; a sale can take months and cost tens of thousands.
• Control. Owners can renovate, paint and keep pets without asking anyone.
• Stability. A fixed-rate mortgage locks in the principal and interest; rent renewals don’t.
• Time. Owners handle repairs, yard work and contractors. Renters call the landlord.
• Savings discipline. A mortgage forces saving through equity. Renting only wins if you invest the difference.

If you’re renting while you save, our rent calculator shows how much rent fits your income, and the security deposit guide covers the cash you’ll put down at your next lease.

How does insurance change when you buy?

Your insurance bill rises sharply when you buy, because you’re insuring the building, not just your belongings. Renters carry an HO-4 policy, the industry name for renters insurance. Homeowners usually carry an HO-3, which covers the structure as well, and your mortgage lender will require it.

The Insurance Information Institute reports average 2022 premiums of $171 a year for renters and $1,569 for homeowners. Our comparison of renters insurance vs homeowners insurance explains the coverage differences, and our renters insurance cost guide has current renter prices by state.

While you’re renting, keep your renters policy active. It protects the belongings you’ll move into your future home, and many leases require it.

Bottom line

Renting versus buying comes down to how long you’ll stay and what owning really costs where you live. At a 7.40% mortgage rate and a $417,500 median price, the monthly cost of owning runs well above the national median rent, so the break-even year is often several years out. Run the calculator with conservative appreciation and your real plans. If the break-even year comes before you expect to move, buying can make sense; if not, renting and investing the difference is a sound choice.